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Friday, Feb 3, 2023
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Home Prices Up 5.2% in February

Housing prices in San Diego County are soaring ever higher as inventory drops with the peak selling period still to come and experts said there’s every reason to think prices will continue to rise.

Not Slowing Down

‘It’s crazy. It is not slowing down,” said Carla Farley, president of the Greater San Diego Association of Realtors. “Summertime is always high for us, and here we’re coming in the spring and spring and summer is generally when we go up.”

The median price of single family homes rose 15.2% in February to $777,777, according to the association, and the inventory of homes on the market dropped to less than a month.

“Our market-wide inventory levels are down 57%, year over year,” said Farley, owner of Corban Realty Group.

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Historically, the inventory of homes on the market has been three to four months, Farley said.

The low inventory of housing on the market in San Diego County “is not unlike the national condition of housing which has seen a chronic shortage of supply,” said Jonathan Miller of the national Elliman Report on real estate and president and CEO of Miller Samuel Inc. Real Estate Appraisers & Consultants.

COVID-19

The problem has gotten more acute since the COVID-19 lockdown of a year ago, Miller said.

“It will be interesting to see how this plays out with a slight uptick in mortgage rates because I think a big part of the sales frenzy has been from the plunge in mortgage rates throughout the lockdown and after the lockdown,” Miller said. “It might take some of the frenzy or the edge off but the rates have to really rise a lot further, north of 3% or 4% before there’s a significant impact.”

According to the Federal Reserve Bank, the average 30-year fixed rate mortgage for the first week of March was 3.02%.

Farley said she’s seen no effect of the interest rate bump on homes sales or refinancing.

So many people are refinancing their homes that lenders are taking 90 to 120 days to process them, Farley said.

One effect of the low interest rates and low inventory is that homes are selling at a record pace.

27 Days

According to the Association of Realtors, homes in February 2021 were on the market for 27 days before being sold, down from 39 days in February 2020.

Farley said those numbers don’t tell the true tale, because sellers are getting multiple offers as soon as a house hits the market.

“You put the right price on the house, it won’t sit,” Farley said. “The time on the market is really just because you’re negotiating in the background.”

She said she recently had a home on the market for a little over a day, and had a dozen offers before the seller settled on a deal.

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